BusinessWeek – It’s hard to decide which is the less sympathetic party appearing before the U.S. Supreme Court today. Is it Argentina, which has repeatedly defaulted on foreign debt? Or is it a hedge fund controlled by billionaire Paul Singer, which specializes in buying up distressed debt on the cheap and then suing for full repayment? Argentina calls Singer’s fund a “vulture,” while Singer’s fund says Argentina’s predictions of a financial cataclysm if it loses the case are “speculative, hyperbolic and almost entirely of the republic’s own making.”
The case the high court is hearing today is narrow: Argentina contends that two of its banks can’t be required to disclose information about assets located outside the U.S. But the ultimate issue is much broader, involving big questions about national sovereignty. And it’s creating unusual alliances. The U.S. government has come in on the side of Argentina, while victims of the 9/11 terrorist attacks are siding with the hedge fund.
